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US Oil Imports Set for Multidecade Low in 2025: Who Benefits?
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As 2025 approaches, investors are eager to understand the prospects for energy companies under President-elect Donald Trump’s leadership. His proposed tariffs on imports from major suppliers like Canada and Mexico could disrupt the flow of crude oil into the United States. Meanwhile, with refinery demand expected to decrease next year alongside rising crude production, oil imports are likely to decline. Let’s explore how these developments might impact energy companies.
US Oil Import to Slide Next Year: Here’s Why
The U.S. Energy Information Administration (“EIA”), in its latest short-term energy outlook, predicts that oil production volumes will continue increasing next year despite the possibility that domestic refineries will process less crude. As a result, net crude imports are expected to decline dramatically in 2025. The EIA estimates that net crude imports by the United States will plummet more than 20% to 1.9 million barrels per day in 2025, marking the lowest level since 1971.
Thus, analysts expect the commodity’s export volumes to increase as crude availability rises due to the retirement of some refineries and increased crude production.
Upstream Players Set to Thrive: EOG & COP Poised for Gains
The EIA forecasts U.S. crude oil production to reach 13.52 million barrels per day (MMBbl/D) next year, up from its 2024 estimate of 13.24 MMBbl/D. With increased domestic production and reduced import volumes, exploration and production companies in the United States are expected to gain significant advantages.
Additionally, the EIA projects the average West Texas Intermediate (WTI) spot price to be $69.12 per barrel in 2025, a decrease from the expected price of $76.51 this year. This price drop is partly due to downward revisions in global oil demand projections for next year. The EIA has reduced its global crude demand forecast for 2025 from 104.4 MMBbl/D to 104.3 MMBbl/D.
Although commodity prices are expected to be lower next year, the outlook remains favorable for exploration and production. U.S. oil and gas companies will benefit from significantly lower breakeven WTI prices across all shale plays, especially for existing wells. Additionally, the average breakeven price for most new wells is still below the projected price levels, positioning upstream companies like EOG Resources Inc. (EOG - Free Report) and ConocoPhillips (COP - Free Report) for continued profitability in the coming year.
Breakeven WTI Price for US Producers
Image Source: Statista
In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company, carrying a Zacks Rank #3 (Hold), possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ConocoPhillips secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale. COP, which carries a Zacks Rank #3, boasted that its drilling and completion activities are becoming more efficient in all key U.S. basins.
Spotlight on Midstream: KMI & ENB Lead the Way
With higher crude production expected next year and lower imported volumes, there will be more demand for transportation and storage assets to transport the commodity to refineries or export terminals. As a result, companies like Kinder Morgan Inc (KMI - Free Report) and Enbridge Inc (ENB - Free Report) , which belong to the midstream business, including those that manage the logistics and storage of crude oil, are likely to experience increased business activity and growth opportunities.
Kinder Morgan, with a Zacks Rank of 3, operates an extensive network of pipelines spanning 79,000 miles, transporting natural gas, gasoline, crude oil and carbon dioxide.
Enbridge, carrying a Zacks Rank #3, is a leading midstream energy player in North America. It operates an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system. ENB’s gas transportation pipeline network spans 71,308 miles, covering 31 U.S. states, four Canadian provinces and offshore areas in the Gulf of Mexico.
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US Oil Imports Set for Multidecade Low in 2025: Who Benefits?
As 2025 approaches, investors are eager to understand the prospects for energy companies under President-elect Donald Trump’s leadership. His proposed tariffs on imports from major suppliers like Canada and Mexico could disrupt the flow of crude oil into the United States. Meanwhile, with refinery demand expected to decrease next year alongside rising crude production, oil imports are likely to decline. Let’s explore how these developments might impact energy companies.
US Oil Import to Slide Next Year: Here’s Why
The U.S. Energy Information Administration (“EIA”), in its latest short-term energy outlook, predicts that oil production volumes will continue increasing next year despite the possibility that domestic refineries will process less crude. As a result, net crude imports are expected to decline dramatically in 2025. The EIA estimates that net crude imports by the United States will plummet more than 20% to 1.9 million barrels per day in 2025, marking the lowest level since 1971.
Thus, analysts expect the commodity’s export volumes to increase as crude availability rises due to the retirement of some refineries and increased crude production.
Upstream Players Set to Thrive: EOG & COP Poised for Gains
The EIA forecasts U.S. crude oil production to reach 13.52 million barrels per day (MMBbl/D) next year, up from its 2024 estimate of 13.24 MMBbl/D. With increased domestic production and reduced import volumes, exploration and production companies in the United States are expected to gain significant advantages.
Additionally, the EIA projects the average West Texas Intermediate (WTI) spot price to be $69.12 per barrel in 2025, a decrease from the expected price of $76.51 this year. This price drop is partly due to downward revisions in global oil demand projections for next year. The EIA has reduced its global crude demand forecast for 2025 from 104.4 MMBbl/D to 104.3 MMBbl/D.
Although commodity prices are expected to be lower next year, the outlook remains favorable for exploration and production. U.S. oil and gas companies will benefit from significantly lower breakeven WTI prices across all shale plays, especially for existing wells. Additionally, the average breakeven price for most new wells is still below the projected price levels, positioning upstream companies like EOG Resources Inc. (EOG - Free Report) and ConocoPhillips (COP - Free Report) for continued profitability in the coming year.
Breakeven WTI Price for US Producers
In the United States, EOG Resources is one of the foremost explorers and producers of oil and gas, with its crude reserves spanning across the United States and Trinidad. The company, carrying a Zacks Rank #3 (Hold), possesses an extensive inventory of high-quality drilling wells in low-cost, premium resources, ensuring a strong business outlook. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ConocoPhillips secured a solid production outlook thanks to its decades of drilling inventories across its low-cost and diversified upstream asset base. The resource base represents the company’s strong footprint in prolific acres in the United States, comprising Eagle Ford shale, the Permian Basin and Bakken shale. COP, which carries a Zacks Rank #3, boasted that its drilling and completion activities are becoming more efficient in all key U.S. basins.
Spotlight on Midstream: KMI & ENB Lead the Way
With higher crude production expected next year and lower imported volumes, there will be more demand for transportation and storage assets to transport the commodity to refineries or export terminals. As a result, companies like Kinder Morgan Inc (KMI - Free Report) and Enbridge Inc (ENB - Free Report) , which belong to the midstream business, including those that manage the logistics and storage of crude oil, are likely to experience increased business activity and growth opportunities.
Kinder Morgan, with a Zacks Rank of 3, operates an extensive network of pipelines spanning 79,000 miles, transporting natural gas, gasoline, crude oil and carbon dioxide.
Enbridge, carrying a Zacks Rank #3, is a leading midstream energy player in North America. It operates an extensive crude oil and liquids transportation network spanning 18,085 miles — the world's longest and most complex system. ENB’s gas transportation pipeline network spans 71,308 miles, covering 31 U.S. states, four Canadian provinces and offshore areas in the Gulf of Mexico.